slides nov18 2005

From Farmers to Merchants, Voluntary Conversions, and Diaspora: A Human Capital Interpretation of Jewish History: From Farmers to Merchants, Voluntary Conversions, and Diaspora: A Human Capital Interpretation of Jewish History Maristella Botticini & Zvi Eckstein Boston University, Tel Aviv University, Universita’ di Torino U. of Minnesota, CEPR Federal Reserve Bank of Minneapolis CEPR
Question : Question “Can an exogenous change in a religious/social norm have long-term economic consequences?” Jewish economic history in the past two thousand years enables us to answer this question.
Three patterns to be explained : Three patterns to be explained Occupational selection (750-900 CE, Muslim Empire) Jews left farming and entered urban, skilled occupations [JEH paper] Demographics 200-600 CE: Jewish population decreased (4.5 to 1.5 M) 1250-1500: Jewish population decreased (1.2 to 0.8 M) Demographics (800-1200 CE) The migrations of Jewish *skills* within the Muslim Empire and to western Europe
Occupational Selection (750-1200 CE): Occupational Selection (750-1200 CE)
Question Is there a common factor behind the three historical patterns? : Question Is there a common factor behind the three historical patterns? Our answer An exogenous change (1st – 2nd century CE) in the religious norm which defined Judaism brought these long-term economic and demographic outcomes. The destruction of the Temple and the raise of Pharisees.
The Educational Reform: The Educational Reform
Main Predictions of Economic Theory: Main Predictions of Economic Theory Cost of education for farmers with no return to education cause low ability, low income farmers to convert – in the long run Judaism can’t survive in a farming society Jews had a comparative advantage in occupations and locations where return to literacy and communication is high.
A simple model of education and conversions of farmers: A simple model of education and conversions of farmers Two-period overlapping generations model with no pop. growth. 1st period: the child receives education (es) 2nd period: the adult decides his religion (j,n), and child's education Before 200 CE: Jews and non-Jews have same level of education and income. After 200: change in Jewish religious preferences.
Slide9: Jewish individual: uj(c, es; e, x) = log c + x(e+1)es - εh Jewish individual who converts: ujn(c, es; e, x) = log c – πx Non-Jewish individual: uⁿ(c, es; e, x=0) = log c x (>0): exogenous taste parameter Educational reform within Judaism: interaction of x with es and e.
Slide10: Jewish father must provide at least emin = 1 to his son. Cost of child’s education: γ(es)θ γ >0, θ>1. At community level: operating costs of synagogue, teacher's salary, cost of books At individual level: child's intellectual ability opportunity cost of the time the child spends in school Education does not affect productivity and earnings in farming. Budget constraint: c + γ(es)θ + τrF ≤ wF
Testable implications on children’s education: Testable implications on children’s education es∗ = 0 if x(e+1) < (γθ) / (wF – γ - τjF) and if x(e+1) < log [(wF – τjF)/ (wF – γ – τjF)] -  es∗ ≥1 otherwise, and es∗ solves the equation x(e+1) = (γθ(es)θ-1) / (wF - γ(es)θ - τjF) At the community level: γ large in small Jewish communities. negative aggregate economic shocks lower wF At the individual level: families with low-ability children families with high opportunity costs of sending children to school fathers with low x or low e.
Jewish farmers: conversion: Jewish farmers: conversion Jewish farmer converts if log(wF - γ(es*)θ - τjF) + x(e+1)es* - εh < log(wF - τnF) - πx Suppose τjF = τnF Jewish farmers who do not educate their children, convert if ε ≥ πx ≥0. Jewish farmers who educate their sons do not convert even if π = 0.
Testable implications on conversions and Jewish population dynamics: Testable implications on conversions and Jewish population dynamics Because of heterogeneity across individuals (x, γ, θ, e), some Jewish farmers do not educate their children and convert. Also, more conversions when aggregate economic conditions are bad (low wF, high τrF) and in small communities (high γ). In the long-run: Judaism cannot survive in a subsistence farming society as Jewish farming population is decreasing through conversions. Before 8’th CE most Jews are farmers. Reduction in Jewish population can be halted if Jews could find an Occupation that provides high return to their investment in education/literacy – trade and urban occupations – the merchants society. How ? with increased urbanization and the expansion of trade – from 9 CE 90% of Jews live in cities. 2. with migration as traders to better reach better earnings – From 9 CE Jews are spread all over the globe.
Jewish farmers before 8th century: children’s education: Jewish farmers before 8th century: children’s education In a subsistence farming economy, the investment in children's education is a religious sacrifice with no economic return. Safrai (1994): in Roman Palestine food expenses amounted to about 40-50 percent of a family's total expenses. taxes took an additional 30 percent little was left to buy other items such as clothing, books, and paying for the teacher's salary.
Cost of living (in denarii), 1st-3rd centuries C.E.: Cost of living (in denarii), 1st-3rd centuries C.E.
Slide16: Despite being very costly, primary education became widespread in the Jewish communities from 3rd to 7th century. EVIDENCE? Many rulings and discussions in Talmud (see our JEH paper). Yarchi-kalaa in Babylon. The wealth of archeological findings on synagogues (new HERE).
Sample of Synagogues, ca. 200-500: Sample of Synagogues, ca. 200-500
Jewish farmers before 8th century: conversions: Jewish farmers before 8th century: conversions
Jewish farmers before 8th century: conversions: Jewish farmers before 8th century: conversions Eretz Israel Uneducated, poor Jews were early converts to Christianity Samaritans: Samaritan farmers converted to Christianity Mesopotamia Conversions of Jews to Christianity occurred. The size of the Jewish population there decreased despite migrations from Eretz Israel. ________________________________________________________ Evidence that some uneducated Jews did not convert: the ammei ha-aretz in Mishna and Talmud.
Occupational Transition: 750-900 CE: Occupational Transition: 750-900 CE Given stagnant economies in 4th-7th centuries, educated Jewish farmers could not find skilled occupations. But in 8th-9th centuries, urbanization expanded in newly established Muslim Empire. Occupational transition took 150 years. By 900, almost all Jews in Iraq, Persia, Syria, and Egypt, had urban occupations. Occupational selection remained distinctive mark thereafter.
Urbanization in the Near East(in thousands): Urbanization in the Near East (in thousands)
A model of education and conversion of merchants: A model of education and conversion of merchants Merchant's budget constraint: c + γ(es)θ + τrM ≤ wF(1 + Aesα e1-α) Education Jewish merchants invest more than non-Jewish merchants in children's education. WHY? Conversion If τjM = τnM, no Jewish merchant will convert. (ii) Over time, the proportion of merchants will increase.
Slide23: Education: tons of evidence from Geniza and Responsa No or few conversions between 800 and 1200.
Voluntary Diaspora: The migrations of Jewish *skills*, ca. 800-1250: Voluntary Diaspora: The migrations of Jewish *skills*, ca. 800-1250 Main insight: the educational requirement in Judaism can survive in the long run only if the Jews can find occupations with high returns to their investment in education. The migrations of Jewish people within the Muslim Empire (ca. 800-1000) to western Christian Europe (ca. 900-1250) support this argument.
Slide25: Migrations within the Muslim Empire (800-1000): Voluntary and Free Jewish craftsmen and merchants freely settled in Egypt, North Africa. Muslim Spain: the “golden” age. Migrations to western Europe (900-1200): Voluntary and Regulated Jews migrated to France, Germany, and England upon invitation by local rulers. Wealthy communities in hundreds of towns. Because of their high human capital and skills, Jews were viewed as essential for economic growth to the point that local rulers competed to have some Jews settle in their towns. No restrictions on Jewish economic activities.
Sample of Medieval Charters: Sample of Medieval Charters
The height of the Jewish Diaspora: The height of the Jewish Diaspora From the travel itinerary of Benjamin de Tudela (1170): In Muslim Iraq and Iran, 80 percent of world Jewry. Muslim Spain: tiny and wealthy Jewish communities in more than 150 cities and towns. France, England, and Germany: small and prominent Ashkenazi Jewish communities lived in more than 160 locations. Plus, tiny Jewish communities all over Italy, Bohemia, eastern Europe, Turkey, the Middle East, Egypt and North Africa, all the way to central Asia, China, and India.
SOMETHING INTERESTING: SOMETHING INTERESTING Contemporary Jewish populations show a closer genetic link to Jews from far away locations than to their neighboring non-Jewish populations. Especially the Ashkenazi Jews of eastern Europe are genetically closer to Jews from the Middle East and North Africa, as well as to other Middle Eastern non-Jewish populations, than to eastern European non-Jewish populations. This provides additional and independent evidence that there were no significant conversions to, and out of, Judaism once the Jews became merchants and migrated to western and then eastern Europe, and it clearly shows that the Jews all migrated from the same original location.
The Mongol Shock --- Could the Jews be farmers?: The Mongol Shock --- Could the Jews be farmers? The Mongols invaded Persia and Iraq in 1256-60 and destroyed the economy. Because of massacres, starvation, epidemics, total population was reduced by half. Jewish population shrank from about 800 thousands to about 100 thousands.
The Mongol Shock: The Mongol Shock
Slide31: No evidence that Iraqi Jews migrated in large numbers to western Europe (REMEMBER: migrations to Europe were regulated). Death rate from starvation and epidemics similar to local population. Jewish death toll from massacres by Mongols was lower. The much larger reduction was the outcome of voluntary conversions. These conversions among low-income Jews when the economy became again a subsistence farming support our main insight.
Why do we work on this topic?: Why do we work on this topic? Because it is fun (and we were too curious to know…) What’s next? From merchants to moneylenders in medieval Europe …..Restrictions on Christians? NO!
Occupational Selection (750-900 CE): Occupational Selection (750-900 CE)
Jewish Population Dynamics: Jewish Population Dynamics

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